Case 3:14-cv AJB-NLS Document 67 Filed 05/27/16 Page 1 of 55. 3:14-cv AJB-NLS

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1 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 Little Fawn Boland (CA No. 0) Ceiba Legal, LLP Madrone Park Circle Mill Valley, CA Phone: () -0 ext. 0 Fax: () - littlefawn@ceibalegal.com In Association With Pro Hac Vice Kevin C. Quigley (MN No. 0) Gray, Plant, Mooty, Mooty & Bennett, P.A. 0 South Eighth Street Minneapolis, MN 0 Phone: () - Fax: () - kevin.quigley@gpmlaw.com Pro Hac Vice Scott Crowell (AZ No. 00) Crowell Law Office-Tribal Advocacy Group W. State Route A, Ste. Sedona, AZ Phone: () 0- Fax: (0) 0- scottcrowell@clotag.net :-cv-0-ajb-nls

2 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 STATE OF CALIFORNIA, v. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA Plaintiff, IIPAY NATION OF SANTA YSABEL, et al. Defendants. UNITED STATES OF AMERICA, v. Plaintiff, IIPAY NATION OF SANTA YSABEL, et al. Defendants. CASE NO. :-cv-0-ajb-nls CASE NO. :-cv-0-ajb-nls TRIBAL DEFENDANTS CONSOLIDATED MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO USA AND STATE OF CALIFORNIA MOTIONS FOR SUMMARY JUDGEMENT [ECF # & #] [FRCP RULE & ] Hearing Date: June, Time: :00pm Courtroom: B Judge: Hon. Anthony J. Battaglia :-cv-0-ajb-nls

3 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 TABLE OF CONTENTS I. INTRODUCTION... II. FACTUAL BACKGROUND SUMMARY... III. LEGAL STANDARDS... A. Summary Judgment Standards... B. IGRA Related Standards... () Tribal sovereign over tribal gaming activities... () Indian law canons of construction... () Chevron deference principles... IV. ARGUMENT... A. The Electronic Gaming System Used by DRB was Properly Classified by the Tribal Regulator as a Class II Technologic Aid to Bingo... () Substantial judicial deference must be accorded to SYGC s classification determination... () IGRA expressly permits Class II gaming using technologic aids... () The exact replica standard for electronic facsimiles promoted by California does not apply to electronic bingo game systems under current NIGC regulations... B. DRB s Bingo Game Play is Legally Conducted on Indian lands... () There is no general prohibition under IGRA preventing tribes from using modern technology communication links like the Internet to promote participation among players so as to increase tribal revenues for tribal needs... (i) Ninth Circuit guidance on the issue... (ii) Continued approval of off-reservation means of access to tribal game play by NIGC and tribal regulators... () DRB s bingo game play originates and is conducted on the math and game management servers housed in the Tribe s gaming facility located on Iipay s sovereign Indian lands... i :-cv-0-ajb-nls

4 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 () The proxy play component aids of the VPNAPS gaming system used to conduct the DRB bingo gaming means the gaming is conducted on Indian lands... (i) (ii) (iii) (iv) Use of a proxy play component with Class II gaming does not violate IGRA... Any communication via an Internet communication link between Account Holders and their proxy agent located on a reservation regarding their proxy service relationship in a step removed from any actual gaming activity to be conducted... Unless and until the Account Holder s proxy initiates the play of the bingo game there is no participation in the Class II bingo game conducted on the VPNAPS gaming system... Use of the Internet is not relevant or dispositive to an IGRA interpretation concerning the conducted on Indian lands question... C. Legal IGRA bingo gaming activity is not subject to any enforcement action under UIGEA or a Class III compact-based claim... V. CONCLUSION... ii :-cv-0-ajb-nls

5 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 CASES TABLE OF AUTHORITIES iii PAGE Anderson v. Liberty Lobby, Inc., U.S. ()... Ariz. Cattle Growers Ass n v. U.S. Fish & Wildlife Serv., F.d (th Cir.0)... AT&T Corporation v. Coeur d Alene Tribe, F.d (th Cir. 0)......,,, Auer v. Robbins, U.S., ()... Cabazon Band of Mission Indians v. Wilson, F.d 0 (th Cir. )... California v. Cabazon Band of Mission Indians, 0 U.S. ()... Celotex Corp. v. Catrett, U.S. ()... Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., U.S. ()......,,, Cheyenne-Arapaho Gaming Commission v. NIGC, F. Supp. d (N.D. Okla. 0)...0 County of Yakima v. Confederated Tribes & Bands of the Yakima Indian Nation, 0 U.S. ()... Diamond Game Enterprises, Inc. v. Reno, F.d (D.C. Cir. 00)... F.T.C. v. Payday Financial, LLC, (D.S.D. )..., Iowa Tribe of Oklahoma v. State of Oklahoma, Case no. :-CV-0-R (W. D. Okla. April, )(Arbitration Award re: Internet Gaming Dispute referred to Binding Arbitration by the Iowa Tribe of Oklahoma and the State of Oklahoma, dated November, )...,,,, Lac Vieux Desert Band of Lake Superior v. Ashcroft, 0 F. Supp. (D.D.C. 0)...0, McFarland v. Kempthorne, F.d 0 (th Cir. 0)... Michigan v. Bay Mills Indian Community, U.S. S. Ct. ()... Minnesota v. Mille Lacs Band of Chippewa Indians, U.S. ()... :-cv-0-ajb-nls

6 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 CASES CONT D Minnesota v. Mille Lacs Band of Chippewa Indians, F.d 0 (th Cir. iv PAGE )... Minnesota v. Mille Lacs Band of Chippewa Indians, F. Supp. (D. Minn. )... Montana v. United States, 0 U.S., ()... Plains Commence Bank v. Long Family Land & Cattle Co., U.S. (0) Rincon Band of Luiseno Mission Indians of the Rincon Reservation v. Schwazenegger, 0 F.d 0 (th Cir. 0)... San Luis & Delta-Mendota Water Authority v. Jewell, F.d (th Cir. )... U.S. v. 0 Electronic Gaming Devices, F.d 0(th Cir. 00)...,, U.S. v. 0 Electronic Gaming Devices, No. -, WL at * (N.D. Cal. Nov., )... U.S. v. MegaMania Gambling Devices, F.d (0th Cir. 00)..., United States v. Kagama, U.S. ()... FEDERAL STATUTES PAGE U.S.C U.S.C U.S.C U.S.C U.S.C U.S.C. 0()... U.S.C. 0()... U.S.C. 0()(A)... U.S.C. 0()(B)(ii)... U.S.C. 0(b)()... :-cv-0-ajb-nls

7 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 FEDERAL STATUTES CONT D PAGE U.S.C. 0(b)()... U.S.C. 0(a)()(A)... U.S.C. 0(d)((C))... U.S.C. (d)... U.S.C.... U.S.C U.S.C. (b)..., U.S.C. (b)()(b)... U.S.C. (0)(B)(iii)... FEDERAL REGULATIONS PAGE CFR Part 0...,,,,,, 0 CFR 0... CFR 0..., CFR Part...,, 0, 0 CFR Part.(g)... CFR Part...,, 0,, 0 CFR Part...., Fed. Reg. (June, 0)...,, Fed. Reg. (June, 0)..., Fed. Reg. (June, 0)... Fed. Reg. (September, )... Fed. Reg. (June, )... Fed. Reg. (June, )... Fed. Reg. 000 (June, )...,, iv :-cv-0-ajb-nls

8 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 FEDERAL COURT RULES v PAGE Fed. R. Civ. P. (a)... TRIBAL LAWS PAGE Tribal Business Transaction Code... TRIBAL REGULATIONS PAGE SYGC -I SYGC -I00...0,, SYGC -I0...0 SECONDARY AUTHORITIES PAGE July,, NIGC Chairman Declaration re: Proxy Play...,, 0 Black s Law Dictionary, th Ed...., Cohen s Handbook of Federal Indian Law, Ed..., Corbin on Contracts,. ()... Gaming Law in a Nutshell, Walter T. Champion, Jr. and I. Nelson Rose, Thomson Reuters ()... Indian Gaming Law and Policy, Kathryn R.L. Rand & Steven Andrew Light, Carolina Academic Press (0)... Indian Gaming and Tribal Sovereignty The Casino Compromise, Kathryn R.L. Rand & Steven Andrew Light (University of Kansas Press (0)...- Williston on Contracts, : ( th ed.)... OTHER AUTHORITIES S. Rep. No., 00 th Cong. d Sess., reprinted in U.S. Code Cong. & PAGE Admin. News 0 ()...,,, S., 0th Cong., nd Sess. ()... :-cv-0-ajb-nls

9 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 OTHER AUTHORITIES CONT D PAGE S., 0th Cong., st Sess. ()... Indian Affairs Comm., Indian Gaming Regulatory Act, Statement of Raymond C. Sheppach, U.S. Senate, Oct.,... National Gambling Impact Study Commission, June, Final Report... November, 00 OGC Advisory Letter re: National Indian Bingo..., 0 September, 0 OGC Advisory Letter re: Reel Time Bingo..., September, 0 OGC Advisory Letter re: Mystery Bingo... April, 0 OGC Advisory Letter re: Nova Gaming Bingo System... December, 0 OGC Advisory Memorandum... June, OGC Advisory Letter re: Bingo Nation Game...0 vi :-cv-0-ajb-nls

10 Case :-cv-0-ajb-nls Document Filed 0// Page 0 of 0 I. INTRODUCTION In this consolidated action, Plaintiffs United States ( USA ) and the State of California ( California ) seek to stop the operation of Desert Rose Bingo ( DRB ), a tribal gaming business located on the sovereign lands of the Iipay Nation of Santa Ysabel ( Iipay or Tribe and together with certain related entities and individuals collectively Tribal Defendants herein). Both USA and California assert claims based upon the Unlawful Internet Gambling Enforcement Act ( UIGEA ), U.S.C. - and California also claims an alleged breach of its class III gaming compact with Iipay. Since the very beginning of this litigation, Tribal Defendants have contended that the gaming offered by DRB is legal Class II bingo conducted under the Indian Gaming Regulatory Act, U.S.C. 0 et seq., P.L. 00-, 0 Stat. ( IGRA ) and therefore is not subject to any UIGEA enforcement action or a class III compact-based claim. This raises the central question to be answered by the court in this action: Does the gaming offered by DRB constitute Class II bingo that is legally conducted on Indian lands under IGRA? If the answer is yes, then the USA and California UIGEA and class III compact-based claims are meritless and must be dismissed with prejudice. If the answer is no, then DRB is subject to an appropriate injunction order precluding DRB gaming operations from using the current version of the gaming system at issue. Answering the central question in this action requires a two-part analysis that avoids co-mingling distinct legal standards and issues. First, the court must In addition, California s claims are barred by the tribal sovereign immunity of the Tribal Defendants for the reasons described in Tribal Defendants to Dismiss Complaint Due to Lack of Subject Matter Jurisdiction and supporting memoranda [ECF #, # and #], which Tribal Defendants reassert and incorporate herein. :-cv-0-ajb-nls

11 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 undertake an analysis under IGRA and applicable National Indian Gaming Commission ( NIGC ) and tribal regulations concerning whether the electronic gaming system used by DRB was properly classified by the tribal regulator as a Class II technologic aid to bingo. Second, the court must undertake an analysis under IGRA and applicable tribal law concerning whether the gaming is conducted on Indian lands. Furthermore, this two-part analysis must be made only through a for purposes of IGRA focused lens i.e. considering only those legal precedents and principles applicable to IGRA, and without regard to any statutory language related to UIGEA or any other federal or state law. In this respect, keeping in mind the backdrop of IGRA (i.e. bingo enjoys a favored status under IGRA), substantial deference must be accorded to the classification determination made by the Santa Ysabel Gaming Commission ( SYGC ) deeming that the gaming to be offered by DRB was Class II bingo played with a permitted technologic aid under IGRA and not a prohibited Class III facsimile as California claims. In this action, California has lead the court astray by using the pre-0 exact replica standard now discarded and made obsolete by the NIGC s adoption of its 0 Part 0 definition regulations amendments and later its Part & Part regulations, as well as the June NIGC One Touch Bingo Pronouncement. In making its classification evaluation, however, SYGC correctly applied current NIGC definition regulations and classification standards relating to the proper e-bingo system evaluation factors used under IGRA since 0. Nothing in IGRA requires Class II bingo game technology to be frozen in the analog th Century world. Quite the contrary, in enacting IGRA Congress specifically intended for tribes to have maximum flexibility in using innovative technological advancements in offering Class II bingo gaming. Neither does IGRA expressly require a person to be physically present on Indian lands at the time the person either () opens an account with the DRB operations to be used at a later :-cv-0-ajb-nls

12 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 time for bingo game play, or () when hiring their proxy to conduct bingo game play at a later time on their behalf. Moreover, in the context of server-based gaming, the location of the servers on which the game play is conducted not the locale of the patron determines the legal situs of the gaming. Consistent with the goals of the federal public policy expressed in IGRA, DRB uses the first IGRAcompliant Class II e-bingo system built with st century high-tech advancements and innovations that enhance the client-server architecture of the standard e-bingo gaming systems currently used in most tribal casinos today; thereby continuing the natural progression of the technological evolution of Class II gaming as Congress has always intended for the Indian gaming industry. In sum, as explained more fully below, the undisputed facts demonstrate both that () the electronic gaming system used by DRB was properly classified by the tribal regulator as a Class II technologic aid to bingo; and () the gaming offered by DRB is legally conducted on Indian lands under IGRA and applicable tribal law. II. FACTUAL BACKGROUND SUMMARY The undisputed facts are detailed in full in Tribal Defendants Consolidated Statement of Material Facts submitted contemporaneously with this memorandum (cited herein as TD Fact No. x ). In summary, before DRB launched operations to the public, SYGC determined by final regulatory action that the gaming to be offered through DRB constitutes Class II gaming within the meaning of IGRA because the bingo game play originates on the math and game management servers housed within the Tribe s gaming facility located on Iipay s sovereign Indian lands, and the gaming system used by DRB (the VPNAPS ) serves as a technologic aid to the bingo game play. TD Fact No.. All bingo game play using the VPNAPS gaming system has been specifically authorized by Tribal law and Tribal regulatory measures, and by SYGC actions adopted under the Iipay gaming ordinance :-cv-0-ajb-nls

13 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 approved by the NIGC pursuant to IGRA. TD Fact Nos., 0, -. Every process of the bingo gaming activity conducted by DRB is subject to oversight by SYGC to ensure full compliance with IGRA and the Tribal laws and Tribal regulatory measures governing the operation of the gaming offered by DRB using the VPNAPS gaming system. Id. The VPNAPS gaming system enhances the client-server architecture of standard electronic-linked bingo gaming systems currently used throughout Indian country today by adding enhanced access security features and a proxy play technology set that aids with the play of bingo games by proxy (tribal employee located on Iipay sovereign lands) and the reporting back to the patron on a time delayed basis the results of the bingo games played. TD Fact No.. The patron s proxy is aided in the proxy play by auto-daub functionality features built into the gaming system. Id. Patrons access the VPNAPS gaming system to request proxy play of a bingo game and receive game result information via a modern technology communication link (i.e. the Internet). TD Fact Nos. -. III. LEGAL STANDARDS A. Summary Judgment Standards Summary judgment can be granted only when no genuine issue exists as to any material fact, and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. (a). A genuine issue of material fact will exist if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., U.S., - (). The burden is on the moving party to demonstrate that it is entitled to summary judgment, with all reasonable inferences to be considered in favor of the nonmoving party. The moving party has the burden of identifying the elements of the claim and the evidence it believes demonstrates the absence of an issue of material fact. Celotex Corp. v. Catrett, U.S., - (). In this action, as part of any UIGEA or class III compact-based claim, the USA and California :-cv-0-ajb-nls

14 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 bear the burden of proving as an element of their case in chief that: () the gaming activity conducted by Desert Rose Bingo is not Class II bingo gaming activity, and () is not legally conducted on Indian lands pursuant to IGRA. B. IGRA Related Standards () Tribal sovereign authority over tribal gaming activities Any analysis of the Tribe s authority over its tribal gaming activities under IGRA must begin with the recognition that Indian tribes are independent sovereign nations pre-existing the United States and its Constitution. See Cohen s Indian Law Handbook, ed. (Lexis Nexis)(hereinafter referred to as Cohen s Indian Law Handbook ),.0[][a], at p.. This historically rooted doctrine of tribal sovereignty is the primary legal and political foundation of federal Indian law and Indian gaming. See Kathryn R.L. Rand & Steven Andrew Light, Indian Gaming Law and Policy, Carolina Academic Press (0) at pp., - (hereinafter Indian Gaming Law and Policy )(Pursuant to their inherent sovereign authority, Indian tribes and their members have for centuries engaged in games involving wagering and other gambling-type activities (i.e. games of chance), conducting these activities according to tribal rules). Id. at pp. -. The inherent sovereign authority of tribes to regulate their tribal gaming activities was specifically upheld by the U.S. Supreme Court s seminal decision in California v. Cabazon Band of Mission Indians, 0 U.S. (). In making the determination that state regulation of tribal gaming activities was preempted by operation of federal law, the Court proceed[ed] in light of traditional notions of Indian sovereignty and the congressional goal of Indian self-government, including its overriding goal of encouraging tribal self-sufficiency and economic development. Id. at. In response to Cabazon, Congress enacted IGRA, using its plenary power over Indian affairs to create a set of limited restrictions on tribes sovereign rights over their tribal gaming activities. See Indian Gaming Law and Policy at p. ; also generally Steven Andrew Light and Kathryn R.L. Rand, Indian Gaming and Tribal :-cv-0-ajb-nls

15 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 Sovereignty The Casino Compromise, University of Kansas Press (0)(describing in detail how a tribe s right to conduct and regulate tribal gaming activities is an inherent tribal right which has been compromised by IGRA). The limited nature of IGRA s compromise of tribal sovereignty authority over tribal gaming activities is expressly stated in the statute s plain text: (d) Regulatory authority under tribal law Nothing in this chapter precludes an Indian tribe from exercising regulatory authority provided under tribal law over a gaming establishment within the Indian tribe s jurisdiction if such regulation is not inconsistent with this chapter or any rules or regulations adopted by the Commission. See U.S.C. (d)(emphasis added). As demonstrated below, the legislative and regulatory measures made by Iipay and SYGC in connection with the gaming offered by DRB are not inconsistent with IGRA s unambiguous provisions or the NIGC s regulations and pronouncements concerning class II gaming with technologic aids permitted under IGRA. () Indian law canons of construction To determine whether the gaming offered by DRB is consistent with IGRA requires an analysis of the statute s text, structure and legislative history, and consideration of prevailing case law regarding IGRA. And this implicates the canons of construction for statutes intended for the benefit of American Indians and tribes which are unique and reflect the special relationship between Indians/tribes and the federal government. The theory and practice of interpretation in federal Indian law differs from that of other fields of law. The Supreme Court has stated: the standard principles of statutory interpretation do not have their usual force in cases involving Indian law. The basic Indian law canons of construction require that treaties, agreements, statutes, and executive orders be liberally construed in favor of the Indians; and all ambiguities are to be resolved in favor of the Indians. :-cv-0-ajb-nls

16 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 Cohen s Handbook of Federal Indian Law,.0[], at p. (emphasis added). The principle of Indian law jurisprudence that demands any ambiguity be liberally interpreted in favor of the Indians has been expressly applied to federal statutes with the same force applied to interpretation of treaties. County of Yakima v. Confederated Tribes & Bands of the Yakima Indian Nation, 0 U.S., (). Nowhere are Indian law canons of construction favoring tribes more appropriate, or more necessary, than in actions between tribes and states. Federal courts have readily recognized their duty to protect tribes against states because [Indians] owe no allegiance to the states, and receive from them no protection. Because of the local ill feeling, the people of the states where they are found are often their deadliest enemy. United States v. Kagama, U.S., (); see also Minnesota v. Mille Lacs Band of Chippewa Indians, U.S., 0 (), F.d 0 (th Cir. ), F. Supp. (D. Minn. )(judicial branch has special duty to protect tribes against state incursions on Indian sovereignty by liberally interpreting Indian law in favor of Indians). It is undisputed that IGRA was drafted for the benefit of the tribe and its members. See U.S.C. 0() (First purpose of IGRA is to establish statutory framework for Indian gaming as a means of promoting tribal economic development, self-sufficiency and strong tribal governments )(emphasis added). Accordingly, in the event that there are two possible constructions as to the effect of IGRA (i.e. whether the Class II gaming offered by DRB is permitted or prohibited by IGRA), the statute is to be construed liberally in favor of tribal interests and to the tribe s benefit. These Indian law canons of construction have particular relevance when interpreting IGRA to identify the parameters of Indian regulatory authority thereunder. As the Ninth Circuit noted in Rincon Band of Luiseno Mission Indians of the Rincon Reservation v. Schwazenegger, 0 F.d 0 (th Cir. 0): :-cv-0-ajb-nls

17 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 Mindful of this ignominious legacy [of state governments antipathy toward tribal interests], Congress enacted IGRA to provide a legal framework within which tribes could engage in gaming an enterprise that holds out the hope of providing tribes with the economic prosperity that has so long eluded their grasp while setting boundaries to restrain aggression by powerful states. See S.Rep. No. 00-, at ()(statement of Sen. John McCain), reprinted in U.S.C.C.A.N. 0, 0; Cong. Rec. at S (statement of Sen. Evans). In passing IGRA, Congress assured tribes that the statute would always be construed in their best interests. See, e.g., S. Rep. No. 00-, at -, as reprinted in U.S.C.C.A.N. at 0. Id. at p. 0 (emphasis added); see also S. Rep. No., 00 th Cong. d Sess., reprinted in U.S. Code Cong. & Admin. News 0 ()(hereinafter S. Rep. No. 00- () ) at 0 ( Committee intends... that tribes have maximum flexibility to utilize games such as bingo and lotto for tribal economic development )(emphasis added); and at 0 ( The Committee... trusts that courts will interpret any ambiguities on these issues in a manner that will be most favorable to tribal interests consistent with the legal standard used by courts for over 0 years in deciding cases involving Indian tribes )(emphasis added). () Chevron deference principles In interpreting IGRA we look to the definitions of the terms and phrases contained therein as set forth by the [NIGC] because legislative regulations are given [Chevron] deference by the courts and are to be given controlling weight. U.S. v. MegaMania Gambling Devices, F.d, - (0th Cir. 00)(emphasis added). Also, informal pronouncements of the NIGC (i.e. advisory guidance letters and interpretation of IGRA set forth by the Commission in the Federal Register ) are entitled to Skidmore respect if they exhibit factors which give them power to persuade. Id. Moreover, the NIGC s conception of what counts as bingo under IGRA as articulated in the agency s [Part 0 regulations] is entitled to substantial deference. U.S. v. 0 Electronic Gaming Devices, F.d 0, 0 (th Cir. 00)(noting that class II bingo under IGRA is not limited to the game we played :-cv-0-ajb-nls

18 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 as children ); see also NIGC CFR Part 0 Final Rule Notice, Fed. Reg., - (June, 0)(declaring that Today s Final Rule more properly captures the intent of Congress as to the distinction between permissible class II aids and prohibited class III facsimiles, and expressing confidence that through its efforts to bring greater clarity to these key definitions courts will provide substantial judicial deference as they had to other NIGC regulations). IV. ARGUMENT The following two-part analysis demonstrates both that () the electronic gaming system used by DRB was properly classified by the tribal regulator as a Class II technologic aid to bingo; and () the gaming offered by DRB is legally conducted on Indian lands under IGRA and applicable tribal law. Accordingly, the USA and California UIGEA and Class III compact-based claims are meritless and must be dismissed with prejudice. A. The Electronic Gaming System Used by DRB was Properly Classified by the Tribal Regulator as a Class II Technologic Aid to Bingo () Substantial judicial deference must be accorded to SYGC s classification determination Pursuant to the regulatory structure crafted into IGRA and the implementing regulations adopted by the NIGC, as well as the historical sovereign rights of tribes, SYGC is the primary regulator i.e. the agency with subject matter regulatory responsibility and expertise in connection with licensing and classifying Class II bingo games using technologic aids. See CFR Parts and. Thus, To this end, key provisions of the Parts and regulations rightly delegate to the tribal gaming regulatory agency ( TGRA ) the legal responsibility and authority to make a classification determination as to whether a server-based electronic bingo gaming system is properly classified as Class II gaming. These provisions include Part.(g) which requires the TGRA [not the NIGC] to establish procedures to safeguard integrity of technologic aids to the play of bingo during installations and operations, including procedures that require: () the TGRA :-cv-0-ajb-nls

19 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 SYGC is the regulatory agency with authority for determining if new and innovative server-based electronic bingo gaming systems shall be deemed a Class II gaming system. Pursuant to its authority under the Iipay Gaming Ordinance and the NIGC Part / regulations, SYGC has adopted specific tribal regulatory regulations that set the regulatory requirements and standards for licensing and classifying Class II Bingo Gaming Systems and Equipment and the operation of the gaming offered by DRB. See e.g. SYGC -I00, SYGC -I00 and SYGC -I0. As explained in the Declaration of David Vialpando, SYGC s classification determination in licensing the VPNAPS gaming system was subject to a detailed process, and the rationale for the agency decision is consistent with current NIGC definition regulations and classification standards relating to the proper e-bingo system evaluation factors used under IGRA since 0 in making its classification evaluation. See Vialpando Declaration, -, 0-. Accordingly, substantial judicial deference must be accorded to SYGC s Classification Determination concluding that the VPNAPS gaming system constitutes a Class II technologic aid to the game of bingo for purposes of [not the NIGC] to approve all technologic aids before they are offered for play ; and () the TGRA [not the NIGC] to determine that all Class II gaming systems comply with Part standards. For an in-depth analysis of the TRGA s primary role in classifying server-based electronic bingo gaming systems under IGRA, see Vialpando Dec. Exhibit No.. See Cheyenne-Arapaho Gaming Commission v. NIGC, F. Supp. d (N.D. Okla. 0)(stating that advisory classification letters signed by staff member of NIGC (i.e. OGC advisory letters ) is simply courtesy correspondence offering guidance, and suggesting that more weight may be given to a letter signed by NIGC Chairman which may be considered informal pronouncements defined as formal declaration of opinion or authoritative announcement. Court also notes that OGC advisory letters by their very nature provide guidance to tribes to assist them in regulating their gambling. )(emphasis added). 0 :-cv-0-ajb-nls

20 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 IGRA. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., U.S., - ()(deference is to be provided when an agency interprets a statute it administers); also Auer v. Robbins, U.S., () (further deference is required when an agency interprets its own regulations). () IGRA expressly permits Class II gaming using technologic aids Under IGRA, Class II bingo-based games conducted by tribes are not limited to just traditional church-hall paper and dauber bingo games. Rather, IGRA expressly permits Class II bingo-based games to utilize electronic, computer or other technologic aids as part of the players participation in the game. See U.S.C. 0()(A); also, U.S. v. 0 Electronic Gaming Devices, F.d at 0 ( Under IGRA, however, bingo and electronic aids thereto are generally permissible in Indian country ). Such technologic aids are distinguished from slot machines (i.e. electronic or electromechanical facsimile of any game of chance) that constitute Class III gaming under IGRA. In connection with bingo based electronic games, each of the Ninth and Tenth Circuits of the U. S. Court of Appeals decisions in 0 Electronic Gaming Devices and MegaMania Gambling Devices is instructive as to the nature of technologic aids for Class II gaming under IGRA (referred to herein collectively as the MegaMania Bingo Cases ). Each decision concerned a game called MegaMania, an electronic bingo game with computer and server components In this respect, the Court must bear in mind that in reviewing regulatory agency action: () if the agency decision is supportable on any rational basis, it must be upheld, see McFarland v. Kempthorne, F.d 0, (th Cir. 0); () an agency s decision is entitled to a presumption of regularity, see San Luis & Delta-Mendota Water Authority v. Jewell, F.d, 0 (th Cir. ); and () the Court is not empowered to substitute its judgment for that of the agency. See Ariz. Cattle Growers Ass n v. U.S. Fish & Wildlife Serv., F.d, (th Cir.0). :-cv-0-ajb-nls

21 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 which links players in different locations who compete against one another in a game of bingo. Both Circuit Courts found MegaMania to be a Class II game played with a technological aid, and are the only reported appellate court level decisions to date to have undertaken a classification analysis for bingo based electronic games. At the same time the MegaMania Bingo Cases were being decided in 00, the D.C. Circuit also held that the Lucky Tab II electronic pull-tabs game was Class II gaming permitted under IGRA. See Diamond Game Enterprises, Inc. v. Reno, F.d (D.C. Cir. 00). In declaring that the electronic pull-tabs machine at issue was a Class II technologic aid, the court rejected the argument that IGRA limited technologic aids to only those devices which operate to broaden player participation in order to qualify as a Class II aid. Id. at 0-. In 0 the NIGC revised its original definition regulations relating to Class II gaming and Class III gaming. These amendments were designed to conform the NIGC regulations to the foregoing modern court decisions which interpreted what electronic gaming devices may properly be classified as Class II games. Many commentators and Indian gaming law practitioners have acknowledged that these amendments helped clarify what constitutes permissible Class II gaming, and have the practical effect of expanding the field of Class II gaming when using clientserver architecture systems. As explained by the NIGC in adopting the new definitions: IGRA permits the play of bingo, lotto, and other games similar to bingo in an electronic or electromechanical format, even a wholly electronic format, provided that multiple players are playing with or against each other. Fed. Reg., (June, 0)(second emphasis added). NIGC regulations now define technologic aids as follows: CFR 0. Electronic, computer or other technologic aid. (a) Electronic, computer or other technologic aid means any machine or device that: () assists a player or the playing of a game; :-cv-0-ajb-nls

22 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 (b) (c) () is not an electronic or electromechanical facsimile; and () is operated according to applicable Federal communications law. Electronic, computer or other technologic aids include, but are not limited to, machines or devices that: () broaden the participation levels in a common game; () facilitate communication between and among gaming sites; or () allow a player to play a game with or against other players rather than with or against a machine. Examples of electronic, computer or other technologic aids include pull tab dispensers and/or readers, telephones, cables, televisions, screens, satellites, bingo blowers, electronic player stations, or electronic cards for participants in bingo games. In contrast, NIGC regulations define an electronic or electromechanical facsimile of any game of chance (i.e. Class III gaming subject to IGRA s tribalstate compact requirements, see U.S.C. 0()(B)(ii) & 0(d)((C)) as follows: Electronic or electromechanical facsimile means a game played in an electronic or electromechanical format that replicates a game of chance by incorporating all of the characteristics of the game, except when, for bingo, lotto, and other games similar to bingo, the electronic or electromechanical format broadens participation by allowing multiple players to play with or against each other rather than with or against a machine. See CFR 0. (emphasis added). In the wake of the foregoing prevailing case law relating to Class II games with permitted technologic aids, the NIGC Office of General Counsel ( OGC ) issued several guidance letters advising that linked bingo systems (i.e. electronic server-based bingo systems using client-server architecture) constitute technologic aids to Class II gaming as permitted under IGRA. See, e.g., September, 0 OGC Advisory Letter re: Reel Time Bingo, pp. -; September, 0 OGC Advisory Letter re: Mystery Bingo, pp. -; April, 0 OGC Advisory Letter :-cv-0-ajb-nls

23 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 re: Nova Gaming Bingo System, pp. -. Recently, given the evolution over the last decade of electronic server-based bingo systems permitted by IGRA, the NIGC promulgated specific regulations addressing standards for Class II gaming systems. See CFR Part, Fed. Reg. (September, ). These regulations are designed to ensure the integrity of electronic Class II games and [their technologic] aids. Id. at. The regulations specifically contemplate a Class II gaming system comprised of several components, including technologic aids, that function together to aid the play of Class II server-based games. Id. at (Part. definition of Class II gaming system ). Every Class II gaming system in use today in Indian casinos is built and operated on the same client-server architecture that is the foundation of the VPNAPS gaming system. TD Fact Nos -. Except for a proxy play technology set and enhanced access security features contained in the VPNAPS gaming system, the design features are the same: client-server architecture with the game play server located in a secure back room electronically linked to patron interface terminal boxes with entertaining video display screens which are located in the public space of the tribal gaming facility i.e. wholly-electronic format. Id., see also Vialpando Dec. Exhibit. No.. The size of the servers used as part of a Class II gaming system in use today in Indian casinos are approximately same size as the servers contained in the VPNAPS gaming system. TD Fact No.. All of the game play video displays on the tangible components of the gaming system, All OGC advisory letters cited herein are available on the NIGC website under the Game Classification Opinions subpage under Legal Opinions under the General Counsel tab. The technology used with today s Class II gaming system reflects the ingenuity of gaming designers which the NIGC has noted is intended to be given freer rein by IGRA in the context of class II gaming. See NIGC CFR Part 0 Final Rule Notice, Fed. Reg. at (June, 0). :-cv-0-ajb-nls

24 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 including the electronic cards generated for the game, are merely a visual representation of the bingo mathematics and game management software programs electronically run on the back room math and game management servers. TD Fact No.. The key feature of today s Class II gaming system for purposes of IGRA is the same one contained in the VPNAPS gaming system: at least two patrons (or their proxies in the case of the DRB gaming) must have requested bingo cards for the same common game (i.e. head-to-head competition among persons is required) or the bingo game will not start and the bingo mathematics and game management software programs will not electronically run. TD Fact No.. In sum, with today s Class II gaming system, the bingo game play originates on the math and game management servers located in the secure back office area of the tribal casino, and the game results are then sent on a time delayed basis via a communication link to the patron s interface, where the game results are revealed by software components that translate the winning or losing associated with the patron s bingo card into an entertaining graphic display. Other than making a request to join a game by purchasing a bingo card, the patron need not take any other action to play bingo games using a Class II gaming system if the tribal casino chooses to activate the gaming system s auto-daub functionality. TD Fact No. -0. The designers of the VPNAPS gaming system started with the standard electronically linked server-based bingo gaming system operated in Indian country since the late-0s and enhanced it by adding a proxy play technology set to the gaming system. This technology set consists of () software and hardware components to assist a patron to engage their designated agent proxy (located on Iipay sovereign lands) via a modern communication link (i.e. Internet) and an There is no requirement that this patron interface be a fixed unit. See CFR Part. (definition of player interface ). :-cv-0-ajb-nls

25 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 electronic proxy engagement feature; () auto-daub (electronic bingo card minder) functionality via software and hardware components to assist the patron s designated agent proxy (located on Iipay sovereign lands) to play (on behalf of patron) a bingo game using a digital-format system with functionality like standard server-client architecture of electronic-linked bingo gaming systems; and () software and hardware components to assist the designated agent proxy to report via a modern communication link (i.e. Internet) on a time delayed basis to the patron the results of the bingo game played on the patron s behalf. TD Fact No.. More recently, the NIGC has issued other guidance as to auto-daub functionality that is relevant to determining the nature of technologic aids permitted with Class II gaming under IGRA. In June the NIGC announced its intention to apply a reinterpretation of a prior agency decision regarding the classification of server-based electronic bingo system games that can be played utilizing only one touch of a button (so-called One Touch Bingo using auto-daub functionality). See Fed. Reg. (June, ). The NIGC now states that permitting a device to assist the player to cover when the numbers are drawn is consistent with the second and third elements of IGRA s three statutory requirements for a game of bingo. Id. at. This is consistent with the district court s holding in U.S. v. 0 Electronic Gambling Devices that there is nothing in IGRA or its implementing regulations... that requires a player to independently locate each called number on each of the player s cards and manually cover each number independently and separately. The statute and the implementing regulations Auto-daub features with class II bingo systems has been specifically authorized by tribal law and SYGC regulatory action and is supported by the NIGC s June pronouncement re: One Touch Bingo systems that is well-reasoned and comprehensive, so Chevron (or at least Skidmore level) deference must be given to these agency decisions. :-cv-0-ajb-nls

26 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 merely require that a player cover the numbers without specifying how they must be covered. See U.S. v. 0 Electronic Gambling Devices, No. -, WL at * (N.D. Cal. Nov.,). In determining that One Touch Bingo systems do not change the fundamental aspect of bingo since in a linked electronic system a player is still competing with other bingo players for a prize, the NIGC gave special consideration to an interpretation of bingo that embraces rather than stifles technological advancements in gaming. Fed. Reg. at 000 (emphasis added). In doing so, the NIGC relied on the flexible policy toward technology for Class II gaming announced by Congress in enacting IGRA, and the key distinction that technological aids are readily distinguishable from the use of electronic facsimiles in which a single participant plays a game with or against a machine [i.e. housebanked games] rather than with or against other players. Id., quoting S. Rep. 00- () at 0 (emphasis added). In sum, even in linked electronic bingo systems with auto-daub features, the fundamental characteristics of a class II bingo game are preserved, unaltered by the game s electronic format. () The exact replica standard for electronic facsimiles promoted by California does not apply to electronic bingo game systems under current NIGC regulations California s contention that the gaming offered by DRB using the VPNAPS gaming system constitutes an illegal Class III facsimile of bingo is entirely premised upon the outdated and discarded exact replica plain meaning standard (i.e. computerized version ) no longer applicable when determining whether an electronic bingo game system constitutes a class III gaming electronic facsimile of bingo. See California Summary Judgment Memorandum [ECF #-], pp. - ( DRB is class III gaming. It is a facsimile that through a computer system exactly replicates the game of bingo)(emphasis added). This is an erroneous legal standard that the Court must not adopt in connection with any game classification analysis of the VPNAPS gaming system. :-cv-0-ajb-nls

27 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 In fact, when the NIGC issued in 0 its new less stringent definitions for Class II gaming technological aids for bingo played in a wholly electronic format (i.e. a manual component of the game is not necessary ) it expressly replaced the exact replica standard for e-bingo systems conducted under IGRA. See CFR 0.; Fed. Reg. (June, 0). In this respect, the NIGC s 0 Part 0 amendments retained the so-called plain-meaning exact replica definition of facsimile adopted by the Sycuan and Cabazon courts in the early 0s (the precedent promoted by California and relied upon by the Court for its initial facsimile conclusion in this matter) but only as to any game of chance except bingo and lotto and other games similar to bingo expressly carving out a socalled server-based electronic bingo game system exception from the definition of facsimile. See Fed. Reg. at 000; also September, 0 OGC Advisory Letter re: Reel Time Bingo, p.. Under current law, electronic facsimile does not include electronic, server-based bingo systems, provided that multiple players are playing with or against each other via the system. In contrast to the legal analysis followed by California and the district court, the classification determination issued by SYGC for the VPNAPS gaming system which expressly declares the primary regulator s finding that the gaming activity It its noteworthy that in seeking to obtain its TRO from the Court, California went out of its way to ignore and divert the Court s attention away from the current server-based electronic bingo game system exception to the definition of electronic facsimile. In the context of explaining to the Court what the NIGC considered to be an electronic facsimile, California specifically cited to a December, 0 advisory memorandum issued by the NIGC s Office of General Counsel in connection with a poker card game system (i.e. not an electronic bingo system). California attempted to use language in the advisory memorandum to support its contention that if a particular aid [to card games] becomes a necessity it becomes an electronic facsimile. In citing this memorandum language to the Court, however, California appears to have deliberately omitted the important qualifying phrase to card games thereby grossly distorting the import of the passage cited. :-cv-0-ajb-nls

28 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 offered by DRB is Class II gaming under IGRA faithfully and correctly applied the NIGC s 0 Part 0 definition amendments (and the NIGC One Touch Bingo Pronouncement) to the VPNAPS gaming system. See Vialpando Declaration, -, 0-. If the Court likewise applied the correct legal standards as part of its classification evaluation of the gaming offered by DRB (and did so keeping in mind the backdrop of IGRA (i.e. bingo enjoys a favored status under IGRA), NIGC regulations and [the MegaMania] cases, as well as the deference courts should grant to SYGC as the primary regulator of electronic bingo game systems under IGRA and NIGC regulations), it could reach only one legal conclusion: the game is Class II bingo played with a permitted technologic aid under IGRA and not a prohibited Class III electronic facsimile. 0 B. DRB s Bingo Game Play is Legally Conducted on Indian lands for Purposes of IGRA Both the USA and California fail to address in any meaningful way the specific question whether the gaming offered by DRB is legally conducted on Indian lands for purposes of IGRA. Both simply rely on bald assertions that it is not, without any serious legal analysis of the IGRA principles and precedents that are necessarily relevant in answering this precise question. See USA Summary 0 See also Vialpando Declaration, 0- for the analysis and reasoning demonstrating that the process and sequence of the bingo game play offered by DRB using the VPNAPS gaming system does indeed satisfy the second and third statutory criteria for bingo under IGRA, and why, therefore, any guidance concern offered by OGC on this issue is not well grounded in IGRA s text and legislative history, applicable tribal and NIGC regulations and the NIGC s very own June One Touch Bingo Pronouncement. See e.g. U.S.C. 0()( the conduct of gaming on Indian lands ); 0(b)()( class II gaming conducted on Indian lands ); 0(b)()( class II gaming conducted on Indian lands ); 0(a)()(A)( class II gaming activity conducted on Indian lands ). In failing to substantively address the gaming conducted on Indian lands issue, :-cv-0-ajb-nls

29 Case :-cv-0-ajb-nls Document Filed 0// Page of 0 Judgment Memorandum [ECF # -] p. ( United States does not seek to interfere with gaming activity conducted on Iipay s Indian lands ); California Summary Judgment Memorandum [ECF # -] p. 0 ( Undoubtedly, [IiPay s] Internet gambling was not conducted only on the Tribe s Indian lands ). In a nutshell, both the USA and California rely on the faulty premise that any use of the Internet as a communication link for patrons to access DRB is not allowed for purposes of IGRA gaming because the patron needs to be physically present on Iipay lands either before or at the time the bingo game play is conducted at DRB s gaming facility using the VPNAPS gaming system. But, as described below, this contention is erroneous and simply not supported by IGRA s text or legislative history, applicable NIGC and tribal regulations and laws, and legal precedents concerning IGRA Class II gaming utilizing modern technology. In particular, both the USA and California ignore or fail to address the specific impact or import of the fact that for purposes of IGRA: (i) there is no general prohibition under IGRA preventing tribes from using modern technology USA and California beg the question what this key phrase means for purposes of IGRA, and, in doing so, put the Court at a disadvantage in understanding an issue that is a difficult question involving complex issues of sovereignty, contract and statutory interpretation, and jurisdiction among others. See Arbitration Award re: Internet Gaming Dispute referred to Binding Arbitration by the Iowa Tribe of Oklahoma and the State of Oklahoma, dated November, (Vialpando Dec. Exhibit No. ), certified by federal district court order dated April, in Iowa Tribe of Oklahoma v. State of Oklahoma, Case no. :-CV-0-R (W. D. Okla.)(hereinafter referred to as the Iowa Internet Gaming Arbitration Award action ). See USA Summary Judgment Memorandum [ECF # -] p. & (alleging that [i]t is undisputed that the Internet is a necessary component of the DRB and when accessing DRB the patrons are physically located off Iipay Indian lands )(emphasis added); California Summary Judgment Memorandum [ECF # - ] p. & (alleging that patrons had to go through the Internet to access DRB and no trip to the [Iipay] reservation was required). :-cv-0-ajb-nls